It certainly isn’t the kind of price correction that many had been eagerly anticipating since last December.
Advance estimates published yesterday by the Urban Redevelopment Authority (URA) showed private home prices fell by 0.1 per cent in the first three months of this year compared to the final quarter of last year.
It was the first drop in prices in nearly three years – the first quarterly decline since the second quarter of 2009. It was also the smallest possible decline – to a single decimal place – that the index could show.
When the fifth set of property market cooling measures were announced last December, many had expected sales as well as prices to be dealt a heavy psychological blow with a break in the cycle of rising prices. They expected this to be the first of many blows to set the housing cycle on its downward spiral.
But at this pace, prices would decline by an overall 0.4 per cent by the year’s end. How’s that for a letdown – a far cry from the up to 30 per cent price correction predicted by many in the early days following the announcement of the most recent set of cooling measures that involved harsh additional buyers’ stamp duties.
As I put it in an earlier commentary at the end of the first month following the imposition of the measures: Is this the worst that the most drastic set of cooling measures ever to be imposed can do to prices and sales? And that its future impact can only dissipate over time? It certainly doesn’t look good.
To add to the disappointment, the latest data showed prices of non-landed private residential properties in the core central region and the rest of central region fell by 0.9 and 0.7 per cent respectively, where it didn’t matter to most Singaporeans. How many could afford them anyway?
Where it mattered – in the outside central region – prices of private apartments rose by 1.2 per cent. Ouch.
I may have more bad news for those waiting for a more meaningful price correction. The feedback I am getting from housing agents is that the resale market – yes, you heard it right – has picked up recently and that momentum is building up once again.
Not the kind of news some want to hear right now.
By Colin Tan – head, research and consultancy, at Chesterton Suntec International.
Source : Today – 3 Apr 2012
